what is co branding or co branding agreement? An agreement that is drawn between two or more companies by which one of the company’s contracts with the other in order to cooperate in the joint promotion of a certain product by co branding it with that of the other company. This leverages the market standing of both brands and adds value to the co-branded product for which customers are willing to pay a premium. The companies contract to enjoy the mutual benefit they can derive from such an association.
When Do You Need a Co Branding Agreement?
A company may decide to cooperate with another company in order to co-brand one or more of its products with one or more products of the other company, adding value to the co-branded product that arises from such cooperation. This is a marketing strategy by which both companies derive the mutual benefit of combining the two brands. Customers are usually willing to pay a premium for such a hybrid product that bears the names of both the companies. In the event of such an association, the companies must draw a co brand agreement between themselves.
You would need a co branding agreement if:
- You are the owner of a brand that is cooperating with another brand to create a hybrid product that uses the logos, color schemes, design elements, or any other trademarks of a product or service of another company.
Inclusions in Co Branding Agreement
A co brand agreement must mention the effective date, and identify the parties to the contract and establish the relationship between them. It must also detail the procedures that the companies will jointly undertake in the development and implementation of their co-branded hybrid product.
It must include clauses that permit both companies to use their respective trademarks such as logos, color schemes, and design philosophy in the development and implementation of the hybrid product and the limitations to these licenses to use these trademarks. It must be decided who will own the rights to the intellectual property of the co-branded product and the stake of each party in it.
Other important terms include payment of consideration, taxes and audit rights, and terms of termination of the contract. As with any agreement, caution must be exercised while drafting the terms of the contract in order to avoid any unexpected liabilities.
How to Draft Co Branding Agreement?
Procedure to draft the branding agreement template:
- Mention the effective date of the agreement.
- Identify the contracting parties and their relationships under the agreement.
- Make provisions for how the development and implementation will take place with the joint effort of both the firms.
- Mention the rights of both the parties and the limitations to them.
- Mention who will own the intellectual property of the hybrid product arising out of the agreement.
- Mention the provisions for warranty, waiver, and limitation of liability.
- Include any other terms that may be required by local, state, or federal law.
- Have the document signed by the representatives and their witnesses to make the document legal.
Benefits of Co Branding Agreement
- Both parties stand to gain from the agreement as the hybrid product arising from such an agreement would leverage the market standing and brand influence of both the brands, which would see customers more willing to pay a premium for it.
- The brands stand to gain by gaining the loyalty of the user base of the other brand in addition to benefiting from the publicity that the association would bring them.
- The agreement lays down the rights of each contracting party and makes sure that they fulfill their obligations towards each other.
- It lays down who owns the rights to the intellectual property of the hybrid product.
Key Terms/Clauses of Co Branding Agreements
The following key terms must be included:
- Development and Implementation: This clause outlines how the development of the hybrid product will take place.
- Rights to Intellectual Property: This clause determines the stake of each company in the intellectual property that arises from their cooperation.
- Use of Trademarks: This allows the contracting companies to use whichever specific trademarks of the other company they agree to use as per the agreement.
- Default: This term specifies what actions or inactions constitute an event of default or non-performance.
- Limitation of Liability: This clause limits the liability of the parties to the contract to any extent that is mutually agreed upon.
- Termination: This is a provision that details under what condition the parties can terminate the contract and the procedure to do so. It must also indicate the effects of such termination.
Sample Co Branding Agreement
You can download co branding agreement sample here.
Download this USA Attorney made Original Agreement for only $9.99
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This agreement is made between the “Owner” and “Provider” on the effective date of 16th November, 2011.
Owner represented by
Mr. Nakuro Takashita
Address: 13747 Stone Drive, Carmel IN 46032
Contact number: (317) 818-6888
Provider represented by:
Ms. Gracie Newport
Address: 15853 Bridgewater Club Boulevard, Carmel IN 46033
Contact number: (317) 575-0021
Terms and Conditions:
- “Program Member(s)” stands for “Nakuro Corp” members who under the Co-brand Agreement have complete access to the Application.
- The “Application Provider” herewith known as “Dreams United” will have to develop and maintain on its own expenses the Application known herewith as the “Co-Branded Application” for “Nakuro Corp”.
- The “Co-Branded Application” developed by “Dreams United” needs to be enhanced with content and various functionalities, some of which are described in EXHIBIT D.
- Either party “Nakuro Corp.” or “Dreams United” can terminate the Co-brand Agreement if there is any breach of the agreement and if this breach in agreement is not sorted out with a period of thirty (30) days from the date of the breach then the agreement can be terminated by sending a written notice to the other party.
IN WITNESS WHEREOF, the parties “Owner” and “Provider” have executed this Co-Brand Agreement as on the date set forth which is 11/16/2011 (MM/DD/YY).
SIGNED FOR AND ON BEHALF OF OWNER BY:
SIGNED FOR AND ON BEHALF OF PROVIDER BY: